Portugal's NHR 2.0 (IFICI) Tax Regime in 2025
Learn more about Portugal's new Tax Incentive for Scientific Research and Innovation (IFICI), also known as NHR 2.0 tax regime.
What is Portugal’s Tax Incentive for Scientific Research and Innovation (IFICI)?
The Tax Incentive for Scientific Research and Innovation (IFICI), also known as NHR 2.0 tax regime, is a Portuguese tax regime designed to attract highly skilled professionals to Portugal.
It supports the country’s goals of fostering innovation, driving digital transformation, and enhancing the global competitiveness of Portuguese companies. This program offers significant tax benefits to qualifying individuals engaged in specific professional activities or industries, helping Portugal become a hub for knowledge-based economic growth.
The IFICI provides a 20% flat tax rate on income derived from eligible employment and self-employment activities for up to 10 years, making it an attractive option for professionals looking to relocate.
Additionally, income earned abroad—except for pensions—is tax-exempt in Portugal under this tax regime, provided it is declared for tax progression purposes.
However, individuals who previously benefited from other tax regimes, such as the Non-Habitual Residency tax regime (NHR) or Return Program, are not eligible. It is important to note that this regime can only be accessed once per taxpayer.
How does NHR 2.0 (IFICI) compare with the existing NHR Tax regime?
Eligibility Requirements and Professions
To qualify for the IFICI, individuals must be new tax residents in Portugal, meaning they have not been considered residents in the past five years. Applicants must derive employment or self-employment income from professions deemed highly qualified or from activities that align with the regime’s goals.
These include teaching and scientific research roles in higher education or national innovation centres, as well as positions in certified start-ups or economic activities recognized by government agencies such as AICEP (Portuguese Trade & Investment Agency) and IAPMEI (Institute for the Support of SMEs).
Eligible professions include general and executive managers, medical doctors, specialists in physical sciences, engineering, IT, communication, industrial designers, and university professors. These roles must generally be supported by a doctorate degree or a bachelor’s degree with three years of professional experience.
The IFICI also supports professionals working in export-oriented industrial and service companies. These companies must generate at least 50% of their turnover from exports and operate in sectors like manufacturing, information technology, and research and development (R&D).
Certified start-ups, which are central to this regime, must operate for less than 10 years, employ fewer than 250 workers, and generate an annual turnover of less than €50 million. They must also demonstrate innovation or secure external investments such as venture capital or funding from the Portuguese Development Bank.
Application and Registration Process
Accessing the IFICI requires proper registration with the relevant authorities. Applicants must submit their enrolment requests to designated entities, such as the Tax Authorities, AICEP, or IAPMEI, depending on the nature of their activity.
For those who became tax residents in Portugal during 2024, a transitional deadline of March 15, 2025, applies, while all others must register by January 15 of the year following their residency. Supporting documents, as specified in the regime’s regulatory framework, must accompany the application.
Employers also play a key role in the registration process. Companies employing individuals in highly qualified roles must confirm their compliance with eligibility criteria through the Portuguese Tax Authorities’ online portal. For industrial or service companies, this includes verifying export turnover thresholds and activity alignment with the regime’s requirements.
Additional Considerations
While the IFICI offers compelling benefits, there are important limitations. For example, taxpayers earning income from entities located in blacklisted jurisdictions are subject to aggravated taxation at 35%.
Moreover, the regime excludes individuals who have already benefited from the NHR or Return Program, and non-compliance with registration deadlines can delay access to benefits. Special provisions for residents in Madeira and the Azores are expected but await further clarification through regional legislative decrees.
Disclaimer: The information presented here should not be considered as financial or legal advice. It is strongly recommended to consult with qualified tax professionals or legal experts before making any decisions based on this information
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